Demag Cranes AG Management, Supervisory Boards Recommend Rejection of Terex Offer

The Management Board and Supervisory Board of Demag Cranes AG have unanimously agreed that the voluntary public tender offer published by Terex Industrial Holding AG on May 19, 2011 is not in the interest of Demag Cranes AG. They have recommend that shareholders of Demag Cranes AG should not accept the offer price of EUR 41.75 by Terex Industrial Holding AG.

In a published statement, the Management Board and Supervisory Board of Demag Cranes AG gave reasons for their view that the tender offer with an offer price of EUR 41.75 is not in the interest of Demag Cranes AG (see sidebar).

 

In their statement, the Management Board and Supervisory Board referred expressly to the fact that Terex Industrial Holding AG has not offered any dialogue on the tender offer. As such, it is not possible for the Management Board and Supervisory Board to conclusively assess the strategic aims pursued in the offer or any other intentions of the Terex Industrial Holding AG – including with regard to locations and jobs, according to their statement.

 

Demag Cranes plans sustained, profitable growth

The Management Board and Supervisory Board of Demag Cranes AG based their recommendation notably on the following considerations: • The Management Board and Supervisory Board of Demag Cranes AG regard the offered price of EUR 41.75 to be inadequate from a financial point of view. Deutsche Bank AG and Rothschild GmbH have confirmed this assessment to the Management Board and Lazard & Co. GmbH has independently confirmed the assessment to the Supervisory Board in their respective fairness opinions. • The Demag Cranes Group pursues a clear and successful strategy, which is geared to sustained and profitable growth. Given the positive economic outlook and the strategic positioning of Demag Cranes, the Management Board and Supervisory Board expect to regain strong rates of revenue growth in the next two financial years. As of today, the company anticipates generating a group revenue in the ongoing financial year of approx. EUR 1.06 billion (previous target: EUR 1.02 billion to EUR 1.05 billion). For the financial year 2010/2011, the Company anticipates an operating EBIT margin of approx. 6.4 percent (previous target: 6.1 to 6.5 percent; financial year 2009/2010: 5.8 percent). No later than financial year 2012/2013, Group revenue is forecast to grow to EUR 1.3 billion and therefore to exceed the record level reached in financial year 2007/2008 (EUR 1,225.8 million). There are plans for new emerging market product families, among others, to deliver another sharp jump in revenue in financial year 2014/2015 to approx. EUR 1.7 billion. Subject to meeting the revenue target, we expect the Group operating EBIT margin to be above ten percent by as early as financial year 2012/2013. The operating EBIT margin is set to climb again sharply with the significant projected revenue growth in financial year 2014/2015.

Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries such as Demag Cranes & Components GmbH and Gottwald Port Technology GmbH, agencies and a joint venture. In financial year 2009/2010, the Group, with its 5,711 employees, generated revenue of EUR 931.3 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the Frankfurt Stock Exchange and is traded on various indices including the MDAX®.</P< div>